Wayne Swan (Lilley, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak about the continuing tax avoidance and evasion of BHP. BHP is using political muscle to continue to eat away, like a tax termite, at the integrity of our company tax system and royalty system. BHP continues to hit new lows of corporate behaviour. In recent times, in the Queensland Supreme Court, it has sought to suppress further evidence of tax evasion on royalties payable to the Queensland government. According to The Australian, a new assessment has now been issued to BHP by the Queensland Office of State Revenue, believed to be in the several hundreds of millions of dollars.

The hearing of this latest claim begins in the Queensland Supreme Court on Monday, 28 May. It will add to BHP's existing $300 million dispute with the Queensland government over royalty avoidance through transfer pricing. Altogether, this pushes claims against BHP's marketing hub from state and federal governments to $1.8 billion. No wonder BHP has done its best to ensure its misdeeds are not examined in the court of public opinion. BHP has sought orders from the Queensland Supreme Court to suppress key evidence relating to the price it charges its customers for coal and the amount that it told the Queensland Treasury that it should pay royalties on. In open court next week these documents will be revealed.

BHP is one of the biggest tax dodgers in the country, if not the biggest. Its Singapore marketing hub is a blatant exercise in tax minimisation, a fiction confected to aggressively reduce BHP's tax bill and minimise its contribution to Australia. The Queensland government is demanding that BHP pays royalties on the amount that the final coal customer, typically in China, pays to BHP's Singapore marketing hub. True to form, BHP only wants to pay royalties on a much smaller amount—namely, the amount that the Singapore marketing hub pays to the BHP Mitsubishi Alliance in Australia for its own coal. This is the information that BHP has sought to suppress in the Supreme Court of Queensland.

When I've raised claims about BHP and its marketing hub, BHP has sought to present itself as a model corporate citizen, fully transparent, when in fact at every turn it has endeavoured to suppress the truth and mislead the public about its tax activities. BHP's Singapore tax shield exists solely to smuggle profits out of Australia. There is no question that BHP has been gaming the system and is in a billion-dollar dispute with the tax office over its unpaid taxes. BHP's evasion of state royalty payments through its transfer pricing activities has robbed the governments of both Queensland and Western Australia. When companies are rorting the system both at the state and federal level they give a green light to everybody else to get in there and do the same.

The business community in Australia claim to be a group of honest, tax-paying corporate citizens. Many are, but some are not. Sadly, the Big Australian has become known as the 'dishonest Australian' for the use of its Singapore tax hub and, now, for its attempts to fleece revenue from the state governments of Queensland and Western Australia. What we have in this country is a commodities Kremlin, where some of the big companies are behaving like governments, treating this country and the people of this country with contempt and behaving as if they are above the law. That sort of behaviour produces political polarisation and alienation.

While the Business Council continues its crusade for a cut in the corporate tax rate, the behaviour of those affiliated with it, including its biggest affiliate, BHP, demonstrates just how ineffective and insincere their case for a cut in the corporate tax rate is, when so many of the members of the Business Council of Australia are not complying with the law of the land. They wouldn't pay more, invest more, employ more or increase wages if there were a lower corporate rate, because they're doing everything they can to avoid that rate, whatever rate it may be. Of course, the directors of the boards of these companies who have approved this activity, who are some of our most respected directors in the land, have been part and parcel of breaking the Australian social contract—part and parcel of white-anting our tax system and depleting the capacity of the country to pay for the essential services that make us not only a great economy but a civilised society. We need to see some public contrition from these directors and a commitment to change behaviour. We need to see them put their hands up and say, 'We've not done the right thing.' We need to see a commitment from them to this country, the country that has nurtured them, to pay their fair share of tax so that as a country we raise the revenue we need to grow more strongly and fairly.